Chandler: Get ready for the long haul

HOLDEN — While state Sen. Harriette Chandler was hoping they don't shoot messengers, that was about the only hope she held out to Holden's select board on Monday.

Her message was mostly doom, she admitted.

"We see this as perhaps one of the worst economic crises that the commonwealth has ever been in," Chandler said of a global problem that's come home to roost as a state-level $1 billion deficit for Fiscal 2009. That deficit has resulted in cuts that will be trickling down to the municipal level in the current fiscal year, and the next one as well.

After quarterly revenue fell from what was projected for the second time in Fiscal 2009, Massachusetts Governor Deval Patrick last week announced a 9.74 reduction in state aid for all cities and towns this fiscal year and across all categories of aid except schools.

But he also warned that school aid for fiscal 2010 will be level funded — and level funded means running any organization on last year's budget while costs continue to rise, a recipe for cuts.

Holden will see a cut of more than $600,000 in lottery aid in FY10 according to the governor's version of the budget — at the very least. The reduction in the FY09 budget is around $200,000. The house and senate still have to weigh in with their version of what will happen in 2010.

While some of the numbers for the current fiscal year are solid, the unprecedented nature of this crisis means uncertainty about the future.

"We are in totally uncharted waters," Chandler said. "No one can give you more than a guess."

In the possible good news category, the legislature is considering some avenues of relief for towns to raise their own revenue: Chandler said taxes on liquor, candy, hotel rooms and meals might all be considered. That means the state would pass legislation that would leave room for municipalities to impose local taxes as well on such items as meals and rooms.

"It's kind of up to you and up to us," she told the select board. "It will depend on what the House and Senate will pass and then what you will accept."

Another increase consumers might see is a toll hike on the Mass Turnpike, an option Chandler said isn't finding much favor in the legislature, and even less favor with legislators representing towns along the turnpike.

"People who live on the east-west axis are paying more than their fair share," she said. "It's not fair."

Generally, legislators are not keen to increase tolls until they believe everything has been done to save money on the Turnpike Authority, like consolidating its administration with that of MassHighway, Chandler said.

Added to all this is talk about raising the gas tax in a state Chandler says has one of the lowest gas taxes in the country.

"People are not happy about seeing that increase either," she said.

The possibility of the state seeking revenue from casinos is also less appealing these days, Chandler said, because casinos aren't doing as well in the current economy either.

Select Board Chair David White asked Chandler to consider two methods of relief for municipalities: no longer requiring municipalities to pay prevailing wage, set by union standards, on public projects like the public safety building now going out to bid, and relief from taxes on fuel for town vehicles.

Chandler also suggested that cities and towns keep up the pressure for the state to provide the expected 12.5 percent reimbursement for storm cleanup after the December 11-12 ice storm, which cost Holden more than $5 million. Federal reimbursement of 75 percent, but only in certain categories and only at federal rates, will cover some of the cost. The Massachusetts Emergency Management Agency has traditionally covered half of the remainder, or 12.5 percent.

"We need to be sure that's the minimum you get this time," Chandler said.

That money would have to be appropriated through a supplemental budget.

Emergency management agencies will hold briefings at a temporary office in Holyoke on Wednesday, Feb. 4, from 10 to noon, and at the MEMA headquarters in Natick on Friday, Feb. 6, from 10 to noon for municipalities with questions about the reimbursement process.

Chandler's discussion with the select board is probably only the first of many such to come. She warned that the deficit that's causing cuts to the fiscal 2009 and 2010 budgets is just the beginning.

"We have a long time ahead of us. I ask you to remember this," she said.

Chandler and Sen. Michael Moore will host a forum on the fiscal crisis on March 3 at 6:30 p.m. at South High in Worcester. The speaker will be Michael Widmer of the Massachusetts Taxpayers Foundation. The meeting is open to the public.